Journal of Innovations

Vol. 3, Issue 4

Rejoinder to Heath on Market Failure

AUTHOR(S)

Walter E. Block, Ph.D.

ABSTRACT

This paper offers a critical rejoinder to Heath (2006), challenging his central claims regarding stakeholder theory, stockholder rights, corporate social responsibility, profit maximization, and the prevalence of market failure in capitalist systems. The objective is to demonstrate that Heath’s critique of the free enterprise system is flawed both theoretically and ethically. Drawing upon textual analysis of Heath’s arguments, this study identifies specific logical and empirical weaknesses in his advocacy for stakeholder rights and regulatory oversight. In contrast, the paper defends the classical liberal position articulated by Friedman (1970), who argued that the primary social responsibility of business is to increase its profits. It contends that stakeholder claims often violate the property rights of stockholders and that portraying the market as inherently failure-prone misrepresents the adaptive efficiency of capitalism. The findings suggest that Heath’s position underestimates the moral and practical virtues of laissez-faire capitalism, which, rather than state-led regulationism, offers the most reliable foundation for economic justice and long-term prosperity. By reaffirming the ethical and functional strengths of the free market, this paper contributes to the ongoing defense of economic liberty and private property rights in contemporary business ethics discourse.

DOI

https://doi.org/10.62470/1d251240   

CITE THIS ARTICLE 

Block, W. E. (2025). Rejoinder to Heath on Market Failure. Journal of Innovations. 3(4), 1-18. DOI: https://doi.org/10.62470/1d251240